Question
1. The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20%
1. The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20% a year for the next four years and then decreasing the growth rate to 5% per year. The company just paid its annual dividend in the amount of $1.00 per share. What is the current value of one share if the required rate of return is 9.25%?
A. | $35.63 |
B. | $38.19 |
C. | $41.05 |
D. | $43.19 |
E. | $45.81 |
2. A year ago, you purchased 300 shares of IXC Technologies, Inc. stock at a price of $9.03 per share. The stock pays an annual dividend of $.10 per share. Today, you sold all of your shares for $28.14 per share. What is your total dollar return on this investment?
A. | $5,703 |
B. | $5,733 |
C. | $5,753 |
D. | $5,763 |
E. | $5,853 |
3. A stock has an expected rate of return of 8.3% and a standard deviation of 6.4%. Which one of the following best describes the probability that this stock will lose 11% or more in any one given year?
A. | less than 0.5% |
B. | less than 1.0% |
C. | less than 1.5% |
D. | less than 2.5% |
E. | less than 5% |
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